I don’t do all that much shopping online these days, but when I do, I’m happy to see a company tack on a separate line on my bill for sales taxes.
That might sound strange, but when I see that, I know I’m not going to have to worry about saving receipts and remembering to pay up when tax time comes around (or otherwise face the prospect of being a tax evader).
Just this past weekend, I bought a dozen songs on iTunes so I could burn a CD for my wife for Valentine’s Day. (Don’t worry. I’m not that lame. I also made a romantic dinner at home.)
The next day, I saw in my inbox two separate bills totaling $12.59: $11.88 for the 12 songs, plus 71 cents in sales tax.
What a relief, I thought. Don’t have to worry about sales taxes.
Apple does this right. They charge based on the ship-to-location of the purchase. Apparently, it’s not hard to do it.
Amazon.com does not. They leave it up to customers to keep track of sales taxes, unless the company has a physical presence in their state. That’s strange, considering Amazon also handles the online sales of its partner, Target.com, for whom it collects sales taxes.
To be honest, I hadn’t thought much about all this until I started reporting on the tax gap in Idaho and started talking to small businesses about what public policy changes they’d like to see.
Idaho business owners are divided, which surprised me a bit.
I thought most would rail against the mega-corporations that are allowed to skate away from their responsibilities.
I’m especially sympathetic to Michael Bunnell, owner of the Boise-based music store The Record Exchange, who didn’t get my business over the weekend (even though I’ve bought three or four CDs at his store over the past year). He’s right. It’s an injustice that big corporations can get away without collecting sales taxes, while small businesses like his can’t (and don’t want to).
I also understand where Joe Ellithorpe, owner of Coeur d’Alene-based Northwest Pony Express, is coming from. He’s just starting to dip his toes into Internet retailing, and has watched that part of his business grow to 15-20 percent of revenue over the past eight months. He’s afraid that a forced collection of sales taxes on the state or national level would “kill some of the appeal” of shopping online.
But the bottom line for consumers who want to follow the law is that we have to pay those sales taxes anyway at tax time, even if millions of other people don’t do that currently.
So why should the burden lie entirely on us?
That’s why I think Idaho needs to be at the table in efforts like the Streamlined Sales Tax Project: to protect the interests of small businesses like The Record Exchange that are at an ever growing disadvantage compared to behemoth competitors and to make it as easy as possible for companies like Northwest Pony Express to do their duty.
Because the truth is that the day will come when sales tax collection online becomes mandatory. And we need our state leaders to be at the center of the discussions of how to make the process as painless as possible for businesses in Idaho.
There’s a bill that’s been introduced this legislative session that would allow the Idaho State Tax Commission to join with 23 other states in the Streamlined Sales Tax Project.
I don’t know if this is the right bill or not, but it’s certainly the right idea.